SBA announces opening of PPP loan forgiveness portal
August 9-15, 2021
By The Daily Record Staff
The U.S. Small Business Administration announced on July 28 that it is launching a streamlined application portal to allow borrowers with Paycheck Protection Program (PPP) loans under $150,000 to apply for forgiveness directly through the SBA.
“The opening of this portal allows a simpler method for borrower and lender to meet the need of the business, lender and the agency,” said Region 6 Acting Administrator Herbert Austin, who oversees the SBA region that includes Arkansas, Louisiana, New Mexico, Oklahoma, and Texas
According to the SBA, the new change will help rush relief to over 6.5 million smallest of small businesses nationally, which has been the priority under SBA Administrator Isabel Guzman. The new forgiveness platform began accepting applications from borrowers on Aug. 4. Lenders are required to opt-in to this program through https://directforgiveness.sba.gov.
In addition to the technology platform, the SBA is standing up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications. Borrowers that need assistance or have questions should call (877) 552-2692, Monday – Friday, 8 a.m. - 8 p.m. EST.
“This initiative will allow PPP borrowers to put their concerns of achieving full forgiveness behind them and focus on operating and growing their businesses again,” said Patrick Kelley, Associate Administrator for SBA’s Office of Capital Access. “We are pleased to be able to assist financial institutions across the U.S. in processing forgiveness applications for small business owners.”
Despite the opening of the new loan forgiveness portal, many PPP lenders and borrowers are still waiting for the SBA and U.S. Treasury to respond to forgiveness requests from the first round of PPP funds approved under the $2.2 trillion Coronavirus, Aid, Relief and Economic Security (CARES) Act, signed into law on March 27, 2020. The chaotic PPP loan program that kicked off in April 2020 led to accusations of fraud and favorable treatment to large publicly traded firms and billionaires.
Since then, the second and third round of PPP funds have been approved under the Consolidated Act Appropriations Act signed into law on Dec. 27, 2020, and Biden’s $2.2 trillion American Rescue Plan signed into law on March 11. Terms for both the first and second draw PPP loan programs require borrowers to spend at least 60% of the loan proceeds on payroll cost and other associated expenses to be eligible for forgiveness.
Overall, the SBA and lenders have worked to originate over 11.7 million loans totaling nearly $800 billion in relief to over 8.5 million small businesses. In 2021 alone, SBA has approved over 6.5 million loans totaling over $275 billion with average loan size around $42,000 compared to $101,000 in 2020.
SBA official said over 600 banks have opted into direct forgiveness, enabling over 2.17 million borrowers to apply through the online portal. That represents 30% of loans $150,000 or less that have not yet submitted for forgiveness.
Other COVID-19 relief programs operated by the SBA include Economic Injury Disaster Loan (EIDL), EIDL Advance, Targeted EIDL Advance, Supplemental EIDL Advance, Restaurant Revitalization Fund, Shuttered Venue Operators Grant, and SBA Debt Relief program.
On July 2, the SBA also announced the closure of the $28.6 billion RRF program, a recently created fund to provide economic aid to restaurants and other frontline food and associated establishments struggling to make ends meet because of the pandemic.
As of June 30, Guzman said the RRF program received more than 278,000 submitted eligible applications representing over $72.2 billion in requested funds, three times the amount available. Nearly 101,000 applicants have been approved to restaurants, bars and other restaurant-type businesses, SBA officials said.
In response to criticism that the earlier PPP and EIDL loans under the CARES Act left out black and minority-owned businesses, the PPP2 program also included $12 billion in appropriations for Minority Depository Institutions and Community Development Financial Institutions that underserved firms. Another $20 billion directed SBA grants to companies in low-income communities.
Through 68 district offices across the U.S., the SBA said it has worked in close partnership with states and local communities to oversee the agency’s PPP and EIDL loan programs during the pandemic. Locally, the Arkansas SBA District Office led by Edward Haddock, has held weekly calls and webinars to update local businesses funding options to assist small businesses affected by the COVID-19 pandemic, including webinars on the SBA’s loan forgiveness and review process.
According to the latest PPP data, Arkansas SBA office has processed $5.05 billion in total PPP funding, including about 500 loans above the $1 million mark.